by Elizabeth Lwanga-Nanziri*, South African Saving Institute
As national Savings Month draws to a close, key learnings come into sharp focus. It is clear the savings challenge requires broad collaboration between government and non-government agencies, the private sector and the financial services industry.
It is also apparent that annual awareness-raising – though valuable – is unlikely to drive a fundamental behavioural shift. Ongoing consumer education is essential. Financial literacy levels have to rise significantly.
To do this we need to mobilise a national force of financial educators.
Thankfully, we’ve already got one – YOU; or, more specifically, the thousands of financial advisers that interact daily with consumers on financial issues.
They may not always be seen as such, but these advisers are perhaps the largest single force of financial educators this country has.
Legislative changes and industry initiatives have ensured that those taking on advisory work should be more knowledgeable, more objective and more professional in the country’s history.
They also possess a huge advantage. They communicate when consumers are highly receptive.
When advisers schedule ‘face time’ with a client, there is good reason to believe the individual will be listening carefully and will be eager to absorb important lessons.
Financial planners get up close and personal at a time of maximum focus. This makes them an invaluable resource in the national savings effort.
An adviser’s retirement planning work is particularly important.
Retirement reform has been under way for several years. A system of mandatory saving by everyone in employment appears to be on the cards. In the interim, important messages need to be conveyed:
- Governments can’t simply throw state money at pension provision. Events in Europe underline the point. Workers may be required to retire later and state pensions may remain low.
- State pensions will have to be supplemented by retirement savings by private individuals, and the sooner individuals start the better.
- Retirement saving by those able to do so remains essential.
Retirement industry guidelines on prudent provision sometimes seem quite chilling for those over 35. All educators, however, know the importance of a positive message.
After saying ‘the sooner the better’, the follow-up surely has to be that ‘it’s never too late to start’.
Encouraging people to make a start is absolutely critical and no one is better placed to provide encouragement than financial advisers. I commend them for their efforts in the retirement field. Don’t ever stop. The work is more important now than ever.
‘My savings, my future’ is our Savings Institute slogan, but your educational work as advisers is crucial to that proposition.
* Elizabeth Lwanga-Nanziri is the Chief Executive Officer of the South African Savings Institute, the non-government organisation dedicated to instilling a savings culture.